Important: Options are complex, high-risk products. You can quickly lose all the money invested (the premium) and, in some strategies, additional amounts tied to the collateral committed. They are not suitable for all investors.
Collateral is what gets set aside in your account when you sell an option. If it's a call, your shares are reserved. If it's a put, cash is reserved. It's released when the option expires or you buy it back. If you're assigned, the collateral is used to fulfill the contract.
Hapi only enables 4 strategies: Covered Call, Long Call, Long Put, and Cash-Secured Put. Since there are no spreads, collateral only applies to the two selling strategies: Covered Call and Cash-Secured Put.
How much is reserved?
Strategy | What's reserved | How much |
Covered Call (selling a covered call) | Shares of the underlying | 100 shares per contract |
Cash-Secured Put (selling a cash-secured put) | Cash | strike × 100 × contracts sold |
Example (hypothetical): if you sell 2 Covered Call contracts on a stock, 200 shares are reserved. If you sell 1 Cash-Secured Put with a $190 strike, $19,000 are reserved ($190 × 100 × 1).
When is it reserved?
It's reserved as soon as you submit the sell order, before it reaches the market — not only once it executes. That's why your buying power drops immediately when you submit the order, not when it fills. This prevents you from submitting two different orders backed by the same collateral.
If you cancel the order while it's still pending, the collateral is released immediately. If the order has already reached the market, it's released as soon as the market confirms the cancellation (usually within seconds).
When is the collateral released?
Collateral is released in any of these cases:
The option expires unexercised (OTM).
You buy to close the option before expiration.
You cancel the sell order before it executes.
What happens to the collateral if you're assigned?
If you're assigned (before or at expiration), the reserved collateral is used to fulfill the contract:
On an assigned Covered Call, the reserved shares are delivered to the option buyer.
On an assigned Cash-Secured Put, the reserved cash is used to buy the shares at the strike price.
Assignment can happen at any time before expiration and is outside your control.
Why can't I sell the reserved shares?
While the option is open, shares reserved for a Covered Call are still yours, but they're locked as collateral. You can't sell them until the option expires, you buy it back, or you're assigned.
Why did my buying power go down?
When you sell a Cash-Secured Put, the reserved cash is deducted from your buying power and your available to withdraw — it shows up labeled as "Options collateral." This is expected: it's the backing that guarantees you can fulfill the contract if assigned.
Where can I see the collateral in the app?
You can see reserved collateral in several places:
Portfolio Performance: shown as "Options collateral," within Total in assets.
Asset detail: the Options section shows collateral in shares (Covered Call).
Buying power and Available to withdraw: reserved cash (Cash-Secured Put) is deducted from both.
📌 Important: always check the order's bottom sheet — it shows exactly which options are reserving collateral in your account.
Have questions? Contact our support team. We're here to help.
Our support team doesn't provide investment, tax, or legal advice.
Before trading options, review the "Characteristics and Risks of Standardized Options" document (ODD). Options, stocks, and ETFs are offered by Hapi Securities LLC, member FINRA and SIPC (CRD #311868); custody and clearing via Apex Clearing Corporation. SIPC protects certain securities in the event of broker-dealer insolvency; it does not protect against market losses and does not cover crypto. More information at www.sipc.org. Hapi Securities is self-directed and does not make investment recommendations.